Dynatech Inc. is considering one of the three following courses of action: (1) paying a $0.40 cash dividend, (2) distributing a 6% stockdividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share.Help Dynatech make its decision by completing the following chart (treat each possibility independently):Total assetsTotal liabilitiesShareholders' equityCommon sharesRetained earningsTotal shareholders' equityTotal liabilities and shareholders' equityNumber of common sharesBeforeAction$1,211,000 $$262,000 $554,000395,000949,000$1,211,000100,000$(1)After CashDividend$$$(2)After StockDividend$$$

Stock dividend results in capitalization of retained earnings and increasing in nos of shares.Stock…

Answered: atech Inc. sidering one of the three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Sipacore make its decision by completing the following chart (treat each possibility independently): Total assets (1) Before Action After Cash Dividend $1,196,000 1,146,000 (2) After Stock Dividend 1,196,000 $243,000 $ 243,000 $ 243,000 $ Total liabilities Shareholders' equity Common shares 647,000 Retained earnings Total shareholders' equity 647,000 306,000 256,000 953,000 903,000 710,000 306,000 953,000 Total liabilities and shareholders' equity $1,196,000 $ 1,146,000 $ 1,196,000 Number of common shares 100,000 100,000 105,000
p/ 102. Down River Express has 5,000 shares of stock outstanding with a par value of $1.00 per share. The current market value of the firm is $390,000. The balance sheet shows a paid in surplus account value of $122,000 and retained earnings of $216,000. The company just announced a 2-for-1 stock split. What will the paid in surplus account balance be after the split?  A. $61,000 B. $112,000 C. $122,000 D. $183,000 E. $244,000
The owners’ equity accounts for Vulcano International are shown here: Common stock ($.50 par value) $ 20,000 Capital surplus 210,000 Retained earnings 587,300 Total owners’ equity $ 817,300 a-1. If the company declares a 4-for-1 stock split, how many shares are outstanding now? (Do not round intermediate calculations.) a-2. What is the new par value per share? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1. If the company declares a 1-for-5 reverse stock split, how many shares are outstanding now? (Do not round intermediate calculations.) b-2. What is the new par value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The owners' equity accounts for Mars International are shown here: Common stock ($.50 par value) Capital surplus Retained earnings Total owner's equity Please show the equity accounts will change if: a. The company declares a 5-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for-4 reverse stock split. $20,000 210,000 587,300 $817,300 c. The balance sheet for Mars International is shown below in Market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Equity $817,300 Cash $ 99,660 Fixed assets 717,640 Total $817,300 Total $817,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid? d. suppose the company has announced it is going to repurchase $17,400 worth of stock. What effect…
Which of the following accurately refelects how this event affects the company’s finanacial statements? Which option is the best, A, B, C, D
need part b
The Liang Company's balance sheet has the following capital section. Liang's stock is currently selling for $5 per share. Common Stock (50,000 shares at $1 par) $50,000 Capital in Excess of Par 50,000 Retained Earnings 100,000 $200,000 If Liang declared a 10% stock dividend instead of doing the stock split, what would the relevant section of the balance sheet look like?
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